March 2021 Update

Well the year is flying by and we are again very close to the end of the tax year. Covid has caused a lot of disruption during the year, but just one or two things to remember before welcoming in the New Year!

VAT Deferred Payment

This time last year the Chancellor announced the deferral of VAT for payments due between April -June 2020. If you deferred at that time payment is due by 31st March 2021. If making payment is still difficult, there is a new scheme to help spread the cost, and you can apply to use the scheme by logging on through your VAT account. You need to know how much you still have outstanding, your VAT number etc. and the Balance can be spread over 2 – 11 months. The application needs to be made through your government gateway portal and you need to be the signatory on the bank account.

ISA

If you do have any spare money around you can invest tax efficiently into an ISA before 5th April. There are several types of ISA’s available from stocks and shares to cash and help to buy. Each has different investment limits and qualifying rules.

Dividends

Everyone is entitled to an investment allowance. Using your dividend allowance of £2000, could save you at least 7.5% tax if taken as a dividend rather than earned income. If you have an option to draw a dividend this should be payable by 5th April 2021, to include on your 2021 self assessment return.

Pensions

Last but not least, of the tax efficient investments are pensions. Payment into a qualifying pension scheme will save you tax now but also provide for your retirement. You will need to seek advise from a pensions advisor, for the rates and limits.

Payroll Year End

It’s a busy time of year for all things tax. I’ll be sending out information on payroll shortly, closing the current year and updating and opening the new. P60’s will be issued by the middle of April, once all the appropriate year end checks have been done. I will be using a different payroll software in the new year for those of you using my bureau services. If you would like to talk about payroll or benefits, please do get in touch.